Braid: Budget still ugly, but economy looks better

Finance Minister Joe Ceci usually looks like an undertaker when he unveils quarterly financial results. For two years, it was nothing but economic misery.

Thursday, he was a happy man.

Ceci forecast economic growth of 2.4 per cent in 2017. This was reinforced by the Conference Board of Canada, which puts Alberta’s growth prospects even higher, at 2.8 per cent.

“I like their report better,” joked Ceci.

Growth like that could once again see Alberta close to leading the country. Remember those days? They’re only two years back, but it seems like forever.

Every quarterly report Ceci has issued since mid-2015 has documented a frightening economic slowdown that often had a whiff of collapse. This is the first time he’s been able to credibly forecast a turnaround.

Eighteen thousands jobs have been created since the employment nadir last July. The working rig count is up to 199. Oil prices have jumped more than $20 since their low and now seem fairly stable (if you can ever say that about oil prices).

Non-renewable resource revenue, now approaching $20 billion, is trending $1 billion higher than forecast in the last budget.

The opposition immediately pounced with the obvious question: if you’re getting $1 billion more cash, why on earth is the deficit still forecast at $10.8 billion?

Simple answer: the NDP is spending the windfall, and more. Total spending is forecast to be $53.7 billion, $2.6 billion more than the budget estimate last spring.

The Wood Buffalo fire accounts for a chunk of that, but far from all of it. There will be higher spending on health care, climate change policy, and much else.

The annual deficit is now more than 25 per cent of the year’s provincial revenue ($10.8 billion of $42.9 billion).

The total of all provincial liabilities, including capital obligations, direct borrowing for operations, and much else, is (pause for pulse check) $74.2 billion!

Against that, the province posts financial assets of $64.7 billion. However, Treasury accountants insist that adding the cash value of all public goods — schools, roads, hospitals, etc. — means we’re really in net surplus on the provincial balance sheet.

The report takes no account of the Great Unknown — U.S. trade “tweaks” that here in Canada could feel like having an arm twisted off. If the Americans go after agriculture in a big way, the sector could replace oil as the new basket case.

There’s no question that fiscally, this report has more Achilles heels than an Olympic centipede. All the opposition parties quickly pointed that out.

But the NDP has always believed that provincial finances, although important, aren’t the main political problem during a deep recession.

They think people are much more focused on their personal balance sheets. And, in fact, there are no reports of anybody returning their child benefits and carbon tax rebates, or small businesses refusing to accept their tax cut.

The recovery is tentative and possibly fragile. The NDP won’t be dancing in public.

But this is, quite possibly, the beginning of the dream scenario Premier Rachel Notley and her advisers envisaged from the start.

Their hope is that the economy begins a strong recovery in 2017. In 2018, it may soar. By the time the next election is fought in the spring of 2019, a lot of Albertans could once again be feeling good about their prospects — and maybe even about their government.

Conservatives will remain furious about the state of finances, even if the NDP begins to post smaller deficits and makes some progress toward their distant target of balance in 2024.

But the usual interest groups won’t be furious.

The NDP has preserved jobs for teachers, nurses and government workers. The big political players — the universities and colleges, the public school boards, Alberta Health Services, the rural and urban municipalities — all know they’re well-funded for the times. The NDP isn’t likely to face the deep institutional anger that helped unseat former premier Jim Prentice.

And so, when the leader of a new conservative party pledges deep cuts to spending and services, the votes may not end up where they hope.

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One month into building a new political party and MLA Derek Fildebrandt is discovering it’s not as easy at it looks. Not that building a new party has ever looked easy. Except perhaps to Fildebrandt who announced last month he was interim leader of the Freedom Conservative Party. I’m not sure if he expected thankful voters to stampede to his door, hoist him up in their thankful arms and parade him around the town square. Or maybe he at least expected some press coverage that didn’t in some way mock his checkered political past. He got neither.